NEW YORK
– What stresses small business owners the most? Our
conversations with them and the research we come across suggest
it’s a lack of clarity.

Well, there’s no small business crystal ball – at least one we
are aware of – but if one existed, here’s a look at what it
might reveal for 2014:

Help from Washington?

Look for a more conciliatory attitude in Congress. Lawmakers’
collaboration on a budget deal in December is a sign that
they’ll cooperate on issues affecting small business, including
tax reform, says Barbara Kasoff, president of Women Impacting
Public Policy, a group that advocates for women and minorities
in business. The deadlock over the budget and government
shutdown in 2013 hurt small businesses, including federal
contractors.

The safest bet? An increase in a tax code provision that allows
businesses to deduct up-front rather than depreciate the cost of
equipment like vehicles, computers and machinery. Without action
by Congress, the 2014 deduction is $25,000, down from $500,000
in 2013. With many companies still struggling and congressional
elections in November, lawmakers may boost it.

Revenue strains

A tepid economic recovery will continue to frustrate
small-company owners, says Susan Woodward, an economist with
Sand Hill Econometrics in Menlo Park, Calif. Small retailers are
struggling even as consumers spend more. Growth in online
shopping and a tendency for people to patronize stores owned by
big companies (choosing Starbucks rather than the local coffee
shop, for example) will continue to be a challenge.

Small businesses shouldn’t expect goldmines from government
contracting. Agencies will spend carefully. Some small federal
contractors reported even before the $85 billion in spending
cuts in 2013 that agencies had been cutting back. Contractors
will prospect for business with companies to make up for budget
cuts in 2013 and to diversify their revenue streams.

Labor market challenges

Expect small businesses to struggle to find skilled workers for
jobs like high-tech manufacturing. It’s not a new problem.
Surveys throughout 2013, including monthly reports from the
National Federation of Independent Business, showed that owners
had positions they couldn’t fill.

The situation may change if employers of all sizes keep adding
jobs at the stronger pace of the second half of 2013, says Peter
Cappelli, a professor of human resources management at the
University of Pennsylvania’s Wharton School. A shrinking pool of
workers would force small businesses to train new hires,
something many have been reluctant to do.

Health care may become a recruiting issue. Owners who say they
can’t afford to buy insurance under the health care law could
find it harder to attract top talent.

Finding capital

Companies hoping to borrow from a bank or raise money on the
Internet may get their wish.

Rules governing how companies solicit money from individual
investors online may be completed after a long wait. The
Securities and Exchange Commission published them in October, 10
months later than expected. Websites are already preparing for
the day when the rules go into effect.

Banks are expected to continue gradually increasing their
lending to small businesses. At the end of the third quarter,
the Federal Deposit Insurance Corp. tallied $284 billion in
small business loans, up 2 percent from a year earlier. Banks
are more likely to lend, particularly to the smallest
businesses, if Congress doesn’t get bogged down in budget
battles and the stock market remains healthy, says Jeffrey
Stibel, CEO of the credit rating company Dun & Bradstreet
Credibility Corp.

Technology trends

The number of small businesses that use cloud computing is
likely to keep soaring, but owners may feel some pain as cloud
providers start charging more. In 2013, 43 percent of small
businesses used the cloud, storing data and software offsite and
accessing them via the Internet. That’s up from 5 percent in
just three years, according to a survey by the advocacy group
National Small Business Association.

Cloud providers are starting to price their services like cable
TV companies, says David Rosenbaum, president of Real-Time
Computer Services, a technology services company in New York.
Businesses get attractive introductory offers, but they’re
likely to pay much more in the future, especially if they decide
to move their data elsewhere.

There’s room for small businesses to expand into social media in
2014. More than a quarter don’t use it at all, according to the
NSBA.

Health care

2014 will give business owners a chance to understand the
complexities of the health care law. Insurance brokers and
benefits consultants have said it would take a year of the law
being in effect for owners to get a sense of its impact on their
profits.

Many businesses avoided the law’s requirements by renewing their
2013 policies before the year ended. They’ll need to get up to
speed before renewing in 2014.